With the continuous growth of China's vehicle sales, more private equity and venture capital institutions are optimistic about the investment potential of China's auto parts. In the face of a sharp decline in China ’s stock market, at a forum at China Europe International Business School, Kai Shi Investment General Manager Chen Jiwu still pointed out that under China ’s low-cost, high-quality competitive advantage, the current weak Chinese auto parts industry will Promising. Lenovo investors are also busy looking for future stars in the auto parts sector.
With several auto parts companies issuing announcements with an increase of more than 50%, Chen Jiwu's foresight seems to have been partially confirmed. On July 8, Wanxiang Qianchao, a Chinese auto parts giant, said that its net profit is expected to reach RMB 169.5 million to RMB 192 million in the first half of 2010, a year-on-year increase of 50% to 70%. On July 1, Anhui Zhongding Sealing Co., Ltd., which produces seals and special rubber products, announced that the net profit in the first half of 2010 is expected to reach 153 million to 175 million yuan, an increase of 75% year-on-year. 100%. Both companies attribute part of the growth to the rapid growth of the domestic auto market. Gasgoo CEO Chen Wenkai pointed out that the good times for auto parts companies are also attributed to the high growth of independent brand car sales. In the past three years, the market share of self-owned brands has been rising. In 2009, it even reached a market share of nearly 50%, which is a significant increase compared with 10 years ago. Because of this, the market share of local companies in the field of auto parts is also increasing year by year, especially in the field of commercial vehicles and second- and third-tier parts.
In the face of whether auto parts companies can continue to grow at a high rate in the future, people in the industry are more controversial. Some people believe that China's auto parts companies have problems of small scale and low industry concentration. According to incomplete statistics, there are 11,231 Chinese auto parts companies. Among the listed companies, the slightly larger ones are Huayu Automobile and Wanxiang Qianchao. Gasgoo CEO Chen Wenkai believes that these are the basis for China's auto parts to become bigger and stronger, and that China's auto parts companies' independent research and development capabilities, innovation awareness and overseas development capabilities are improving.
Gasgoo's survey found that China's local auto parts companies have started to increase their share, and have the potential to fight courtesies with foreign investors. In more than 80% of the auto parts market segment, the market share of local auto parts companies has grown; in more than 40% of the market segment, the market share of local auto parts companies exceeds 50%. This is particularly prominent in the field of commercial vehicle and second- and third-level parts and components.
China has entered the year of auto parts integration and acquisition. In recent years, state-owned enterprises such as Dongfeng Motor Group, AVIC Group, China Military Equipment Group and other state-owned enterprises have accelerated the pace of integrating their parts and components assets. Ningbo Huaxiang, a rising star of private auto parts, has also made several overseas dips. According to news from overseas M & A law firms, Chinese companies have appeared in many mergers and acquisitions involving the sale of component assets by General Motors and other international auto companies.
The industry regards Ningbo Huaxiang and Xingmin Steel Rings as the future industry dark horses. Analysts pointed out that Ningbo Huaxiang's customers are mostly high-end customers, such as Shanghai GM, Shanghai Volkswagen, FAW Toyota, Nissan and Roewe, so it is expected to extend its customer base upwards and downwards, thereby gaining greater market share. Xingmin steel ring customers are concentrated in commercial vehicle companies such as Futian, Foton Lovol, Changan, and Jinlong. In the future, if they increase the expansion of passenger cars, they will also benefit from it. In order to save costs, companies currently producing low-end passenger cars have begun to try to replace traditional aluminum alloy wheels with steel rings.
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